The Appellate Division, in Katchen v. Government Employees Insurance Co., re-affirmed the need for clients to be proactive with personal insurance policies and attorneys to thoroughly review all client and carrier documentation at the start of every suit. In Katchen, the plaintiff filed for underinsured motorist benefits after being injured in a 2015 motorcycle accident with an underinsured driver whose policy had a 25,000 policy limit. Litigation ensued after GEICO denied coverage.
GEICO’s argument was clear: although Katchen owned and operated the motorcycle at the time of the incident, it was not specifically listed on his insurance policy. Since exclusions in the body of the policy specifically excluded underinsured motorist coverage involving a motor vehicle “owned by an insured and not described in the declarations,” GEICO argued the policy had a clear and easily understood exclusion that applied to the facts of the case.
Katchen cunningly countered by directing the court’s attention to the declarations page, which stated GEICO would “pay damages for bodily injury and property damage caused by an accident which the insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle or underinsured motor vehicle arising out of the ownership, maintenance, or use of that vehicle.” Since the declarations page did not list any exclusions, according to Katchen, the insurance coverage followed the insured individual rather than the vehicle.
The majority of a split Appellate Division panel sided with GEICO, concluding the policy language, rather than the declaration page, controlled. According to the court, “the fact that the [vehicle] exclusion is not mentioned on the declaration sheet does not bar its enforcement,” as it does not automatically render the policy ambiguous. To rule differently, as the trial court did, would “eviscerate the rule that a clause should be read in the context of the entire policy” and needlessly complicate already-complex policies.
Judge Karen Suter’s strong dissent, arguing that coverage follows an insured rather than a vehicle identified in the policy, may offer a glimpse into how future courts may interpret similar exclusions when confronted with similar facts. Since the case was a published decision, however, it carries a weight that will hopefully influence other courts interpreting similar exclusions in other policies.
Thank you to Brent Bouma for his contribution to this post. Please email Vito A. Pinto with any questions.